Reading the multiples: what sector and size trends tell advisors about client exit readiness

Multiples move for reasons: sector demand, buyer appetite, and company size chief among them. Understanding why they’ve moved this half-year helps advisors give clients more specific, more useful guidance on timing and preparation, rather than general reassurance.

Sector matters, and it's shifting

Business Services posted the largest gain of any sector this edition, up 0.3 to an average 6.3x EBITDA multiple. Software Development and IT Services both eased back 0.2, and Software Development made a notable move: after being named an expected riser last edition, advisors now name it among the sectors they expect to decline, citing uncertainty over which software business models will hold up as AI reshapes the space.

Hospitality & Tourism and Retail Trade remain the sectors most often named as expected decliners. Advisors point to rising employment costs squeezing hospitality margins in particular, a pressure Irish operators recognise well, even where the specific driver (employer PRSI and minimum wage increases, rather than the UK’s employer National Insurance changes) differs.

Size is still the biggest lever

The gap driven by company size, sometimes called the small firm premium, is larger than most sector movements. A company with £200,000 of EBITDA is valued, on average, at 3.6x, up 0.3 this half-year. A company with £10 million of EBITDA is valued at 8.2x. That’s a 4.6x gap between the two, driven by the market’s view that smaller companies carry a higher risk of not repeating their earnings, whether through customer concentration, reliance on the owner, or a less proven route to growth.

For a client planning an exit two to three years out, this is the highest-leverage conversation available to you: reducing key customer or key person dependence, and building a credible, repeatable growth track record, moves the multiple itself, not just the earnings it’s applied to.

Buyer interest is rising too

The average number of seriously interested buyers per company rose to 8.5, up from 7.9 a year earlier, meaning most sellers are facing a more competitive process for buyer attention than they were twelve months ago. That interest varies sharply by sector, as high as 13 in software development and as low as 5 in hospitality, so it’s worth setting a client’s expectations by their specific sector rather than the market average.

What this means for the “when” conversation

For advisors, the “when” and “how ready” questions now carry as much weight as the “if.” A client sitting in a smaller bracket, in a sector with softening multiples, benefits from a longer runway to prepare than one already well positioned.

We’re glad to help you map that runway for a specific client.